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Fight over St. Anthony power flows to the Legislature

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April 25, 2011

By: Nick Halter

Nick Halter

This spring’s snow melt has water gushing over St. Anthony Falls, sending up a mist that nearly reaches the Stone Arch Bridge where visitors snap photos of the historic feature that made Minneapolis the flour milling capitol of the world.

The future of St. Anthony Falls — which is really a concrete spillway — is in the midst of a 12-year battle that has now reached the state Legislature and sparked a debate about authority of local land.

Crown Hydro has been trying since the late 1990s to build a hydroelectric facility on the west bank of the river, just above the falls. By installing turbines 40 feet below Mill Ruins Park, the company says it can produce 3.2 megawatts of clean, renewable electricity to power 2,200 homes.

But the Minneapolis Park and Recreation Board owns that land, and, knowing it is the last defense against construction, has refused to lease the property to Crown Hydro. Park Board officials say they’re worried that the turbines will divert water from the falls, drying up the spillway and turning a historic icon into a wet slab of concrete.

Crown Hydro obtained a Federal Energy Regulatory Commission license in 1999 to build the facility. It does not expire until 2049.

The company has been relatively quiet since it last made an offer to the Park Board in 2007, but in April it made a big push. It made another offer to the Park Board and backed it up with a bill in the state Legislature that could force the Park Board to hand over the land for construction.

Many Park Board commissioners remain vehemently opposed to the project, raising concerns over dry falls, noise from the turbines and the health of surrounding public infrastructure.

“Make no mistake Minnesota and Minneapolis, this project has a huge impact on the river,” said Commissioner Anita Tabb, whose Fourth District includes St. Anthony Falls.

Crown Hydro’s attorney, Tim Keane said the turbines will be inaudible to people and said the facility will only divert a small fraction of water from the falls. Further, it will be built completely underground, so as not to take away park space.

Commissioner Jon Olson (District 2 in North Minneapolis) voiced his continued support of the project. He made an unsuccessful motion on April 6 to direct the Park Board to negotiate a contract with Crown Hydro.

Olson said that since the last proposal the world has endured the BP oil spill and the nuclear incident in Japan.

“This is clean energy, it’s a good project and it’s environmentally friendly,” he said.

State Rep. Phyllis Kahn, whose House District 59B overlooks the falls from the east, downplayed the overall benefit of 3.2 megawatts in the big picture of renewable energy.

The 3.2 megawatts, which would be sold to Xcel Energy, would power 2,200 homes. For perspective on power generation, the Hennepin County Recovery Center near Target Field can power 25,000 homes.

“It’s not going to solve the energy problem,” Kahn said.

To be sure, the spillway at St. Anthony already suffers from low flows. It’s not uncommon in the dead of summer for little more than a trickle of water to run down the concrete.

Northern States Power operates turbines on the east side of the river that generate 10 megawatts and draw river water. St. Paul and Minneapolis draw drinking water above the falls. The Park Board during the summer diverts water from the river to recharge city lakes, according to Crown Hydro’s FERC license.

But Kahn, who supported the project in its infancy because it originally was slated to allow visitors to go below ground and witness a hydroelectric facility in action, said Crown Hydro’s drawdown will either elongate periods of dry falls or make them worse when they do happen.

Park Board President John Erwin told a Minnesota House committee at an April 13 hearing that the Park Board and the State of Minnesota have invested $33 million into the area surrounding the falls, leading to $1.1 billion in development.

According to the city of Minneapolis, in 1980 there were seven housing units in the Mill District, which surrounds the proposed Crown Hydro site. In 2010, that number grew to 1,250, with hundreds more in various stages of planning. The estimated market value of Mill District property has increased from $25 million in 1994 to $440 million in 2009.

“When you watch Monday Night Football, you see the Stone Arch Bridge lit up,” Erwin testified to the committee. “Instead of having a falls, we would have 150 cubic feet per second, which is essentially a wet piece of concrete.”

The bill he was testifying to, House File 1440, would require the Park Board to allow Crown Hydro to build the facility, or else a district court could force the Park Board to do so.

The bill has 25 state representatives behind it, four of whom are DFLers. None of them are from Minneapolis. A similar bill was introduced in the Senate on April 14.

The legislation drew the ire of the Park Board and other Minneapolis officials, who say the state is not only stealing the Park Board’s local control of its own property, but is also a breach of a 1998 agreement the Park Board and Crown Hydro reached.

“It is simply outrageous that the Legislature would even attempt to override the decisions of local government, in this case the Park Board, and compel both the sale of public land and the planning approvals required for a private developer for their private development,” said City Council Member Lisa Goodman (7th Ward).

She added: “What’s next, the Legislature passing a bill ordering the city to sell the Minneapolis Farmers Market land for a Vikings Stadium or sell Gold Medal Park for a new high-rise?”

Park Board Attorney Brian Rice brought out a 1998 agreement between the Park Board and Crown Hydro that says Crown Hydro “will not undertake any steps that will endanger (Park Board) facilities without complete agreement with (the Park Board).”

That prompted the only Minneapolis legislator on the committee, state Rep. Jean Wagenius (DFL-62B), to ask that the bill be thrown out because it meant the state was participating in a breach of contract.

“I think this is an inappropriate bill for us to be considering,” she said.

The bill was eventually referred to another committee, the Government Operations and Election Committee, for further discussion.

Bill Grant, the deputy commissioner of the state’s Office of Energy Security and a Gov. Mark Dayton appointee, offered no opinion of the bill after the committee hearing and said the governor has not yet reviewed it.

Crown Hydro’s latest offer is $500,000 and a minimum annual royalty of $50,000. In 2007 Crown Royal offered $1 million and $75,000 annually for rent.

The Park Board plans to vote on whether or not it will pursue a contract with Crown Hydro at its May 4 meeting.